Sunday, August 17, 2014

The ObamaCare Enrollment Failure

Much of the left has been trying its best to push the notion that "ObamaCare is working," largely based on the announced enrollment total of anywhere from 8 million to 10 million that has come out of the White House. Since this was more than the 7 million they originally said they needed to make the system viable, viola . . . success!
One problem: They counted everyone who enrolled, without regard to whether enrollees ever paid a premium. If you don't pay the premium, you're not insured and you're not part of the system. Thus, your enrollment is meaningless and there's no serious measure that can count you. So how is this phase of the implementation going?
Not well, if the experience of Aetna - one of the largest insurers participating in the system - is any indication. Investors Business Daily reports:
The nation's third-largest health insurer had 720,000 people sign up for exchange coverage as of May 20, a spokesman confirmed to IBD. At the end of June, it had fewer than 600,000 paying customers. Aetna expects that to fall to "just over 500,000" by the end of the year.
That would leave Aetna's paid enrollment down as much as 30% from that May sign-up tally.
"I think we will see some attrition ... We're already seeing it. And we expect that to continue through the end of the year," CEO Mark Bertolini said in a July 29 conference call.
It's not clear how representative Aetna's experience is of broader exchange trends, or whether its projection may be too conservative. (If it were representative, a similar 30% decline would drop ObamaCare enrollment to 6 million or less.)
Still, as one of ObamaCare's largest players, participating in exchanges in 16 states plus D.C., Aetna's experience provides a pretty good window into what is happening across the country, and there are other indications that enrollment has turned down.
Cigna (NYSE:CI) said that it expects its individual market customers, including more than 100,000 in the exchanges, to "move from 300,000 down to 280,000 in that range," Cigna CEO David Cordani said in a conference call.
Other major insurers danced around questions about attrition on recent earnings conference calls, but none denied that it was occurring.
Granted, you can't assume that Aetna's level of attrition will prove to be what happens across the board. The industry overall could do better. Or it could do worse.
Assuming Aetna's experience is not way out of line with what other insurers experience, where does ObamaCare end up if it's back down to only 6 million enrollees, especially given the likely problem of adverse selection that sees those insured through ObamaCare policies skew sicker and older than the population in general?
Also keep in mind that this only measures the attrition so far. For those who didn't have health insurance before because they couldn't afford it, how many are likely to drop off six, nine or 12 months after signing up because they thought they could handle the premiums, but found they couldn't? Especially after they go up again, which appears to be a near certainty?
ObamaCare is only "working" if you base that on phony and irrelevant numbers like the ones the White House has been pushing. The real facts suggest what we've always suspected: ObamaCare is a disaster.
Hat Tip: Best of Cain